Predictive Analytics Actuarial Applications for Retirement Professionals

Background and Purpose  

Predictive Analytics is the process of using modeling and data analysis techniques on large data sets to discover predictive patterns and relationships for a variety of business and science applications. Globally and across many business sectors/practice areas, predictive models have emerged to help guide decisions, allocate resources and target opportunities. More than ever, financial services firms, healthcare providers and government agencies have been further delving into the potential use of predictive analytics.

Over the past few years, the actuarial profession has been actively advancing the use of predictive analytics methods in its work. Actuaries have been fast to collect and transform big data into useful information to glean future tendencies and patterns. The results have had a strong impact as companies are able to use actuarial predictive modeling results to optimize their business practices. In addition, actuaries bring to the table a unique skillset to understand the importance and complexities of preparing the data, combined with the business insights to use the resulting models.

With the overall increased use of these techniques, the Society of Actuaries Retirement Section Research Committee is interested in research that would investigate their use in an actuarial context for retirement work.

Research Objective

The SOA’s Retirement Section Research Committee of the Aging and Retirement Strategic Research Program is seeking researchers to explore and develop material on actuarial applications of predictive analytics for retirement professionals. The following are examples of research approaches that may form the basis for a proposal:

  • Primer - A primer on the prominent types of predictive analytics techniques used written with a retirement professional audience in mind. The primer may be more descriptive than mathematically focused but should include references for further reading for those with little or no background on this subject. It may also include a mapping between tasks performed by retirement professionals and potential predictive modelling techniques.  
  • Literature Review – A collection of articles and reports that describe applications of predictive analytics in a retirement context. Examples are the following:  https://www.plansponsor.com/predictive-analytics-can-help-solve-retirement-plan-challenges/ and https://www.plansponsor.com/predictive-analytics-can-help-solve-retirement-plan-challenges/.          
  • Case Study/New Application – An in-depth case study on an existing application or development of a new application of predictive analytics in an actuarial context for retirement professionals.
  • Data Considerations – An analysis of data sources that may be used for applications of predictive analytics in a retirement context. This may include issues of data integrity and access as well as privacy and ethical concerns.  

Note that the above list is not meant to be exhaustive but merely examples of proposed topics that may be researched. The examples have been deliberately written open-ended to allow latitude in crafting proposal submissions.   

Proposal

To facilitate the evaluation of proposals, the following information should be submitted:

  1. Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
  2. An outline of the approach to be used (e.g. literature search, model, etc.), emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis.
  3. A description of the expected deliverables and any supporting data, tools or other resources.
  4. Cost estimates for the research, including computer time, salaries, report preparation, material costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
  5. A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. The Retirement Section Research Committee is interested in completing this project in a timely manner.  Suggestions in the proposal for ensuring timely delivery, such as fee adjustments, are encouraged.
  6. Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.

Selection Process

The Retirement Section Research Committee will appoint a Project Oversight Group (POG) to oversee the project.  The Retirement Section Research Committee is responsible for recommending the proposal to be funded.  Input from other knowledgeable individuals also may be sought, but the Retirement Section Research Committee will make the final recommendation, subject to SOA leadership approval. The SOA's Research Actuary will provide staff actuarial support.

Questions

Any questions regarding this RFP should be directed to Steven Siegel, SOA Senior Practice Research Actuary (phone: 847-706-3578; email:  ssiegel@soa.org

Notification of Intent To Submit Proposal

If you intend to submit a proposal, please e-mail written notification by November 15, 2019 to Barbara Scott

Submission of Proposal

Please e-mail a copy of the proposal to Barbara Scott.

Proposals must be received no later than December 1, 2019. It is anticipated that all proposers will be informed of the status of their proposal by the end of January 2020.

Note: Proposals are considered confidential and proprietary.

Conditions

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the Society of Actuaries and the researcher.

The Society of Actuaries reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The Society of Actuaries also reserves the right to redirect the project as is deemed advisable.

The Society of Actuaries plans to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).

The Society of Actuaries may choose to seek public exposure or media attention for the research.  By submitting a proposal, you agree to cooperate with the Society of Actuaries in publicizing or promoting the research and responding to media requests.

The Society of Actuaries may also choose to market and promote the research to members, candidates and other interested parties.  You agree to perform promotional communication requested by the Society of Actuaries, which may include, but is not limited to, leading a webcast on the research, presenting the research at an SOA meeting, and/or writing an article on the research for an SOA newsletter.